AACC to Examine Controversial New Law That Could Mean $2.5 Billion in Cuts to Medical Testing Over the Next 10 Years

WASHINGTON – On May 7, AACC will host a webinar about the Protecting Access to Medicare Act of 2014, a new law signed by the president on April 1 that will make the most significant changes to medical test reimbursement that clinical laboratories have seen in 3 decades.

WHY: Cutting medical test payments could increase healthcare spending in the long run by hindering doctors’ ability to catch diseases early and treat them appropriately.

The Protecting Access to Medicare Act will transform the Centers for Medicare & Medicaid Services’ (CMS) current system for reimbursing clinical tests by establishing market-based pricing for existing tests. Starting in 2016, labs will periodically report how much they’re paid for tests by private payers, and then CMS will set the Medicare reimbursement rate as the mean of the private payer rate. These new prices will take effect in 2017.

Some in the laboratory medicine community are optimistic about this new legislation. Though it will reduce medical test reimbursement, it also protects labs from the even more drastic, across-the-board cuts that Congress has typically made in the past. Additionally, it improves upon the current system for integrating new tests and technology into the lab fee schedule. One other potential benefit is that the law increases the transparency of the reimbursement process. It requires CMS to create a panel of experts on clinical testing that will advise the agency on pricing new tests, and to explain how and why it assigns initial prices to new tests until the market rates are established.

However, others worry that this law favors large labs over small labs. Commercial labs can afford to give big discounts to private payers that hospital outreach and other small independent labs can’t afford. If big labs continue this practice, they could drive down reimbursement rates for everyone and make it impossible for smaller labs to compete with them. Additionally, the bill fails to distinguish between point-of-care testing kits and traditional central lab testing kits, even though the former are much more expensive than the latter. This means that the expected drop in rates for traditional tests could make point-of-care testing unaffordable in certain cases, even though point-of-care testing is crucial for making fast diagnoses in the emergency room.

These are just some of the bill’s potential consequences that Root and Kazon will explore as they take a look at the challenges and opportunities facing labs—and by extension, the healthcare system overall—as this new law is implemented.

HOW: To attend this webinar as press, for interviews, or additional information please contact Molly Polen, AACC Director of Communications & PR, at 202-420-7612 or mpolen@aacc.org.

About AACC

Dedicated to achieving better health through laboratory medicine, the American Association for Clinical Chemistry (AACC) brings together more than 50,000 clinical laboratory professionals, physicians, research scientists, and business leaders from around the world focused on clinical chemistry, molecular diagnostics, mass spectrometry, translational medicine, lab management, and other areas of breaking laboratory science. Since 1948, AACC has worked to advance the common interests of the field, providing programs that advance scientific collaboration, knowledge, expertise, and innovation. For more information, visit www.aacc.org.